White House, Mayors Urge Aid for Cities

The White House, joined by a group of big-city mayors, accused Congress on Monday of ignoring the needs of blighted urban areas in deciding how to divvy up an $85-billion package of proposed tax cuts.

“Cities are taken care of in the president’s plan; they have been left out of the House and Senate plans,” Vice President Al Gore said.

Gore, Treasury Secretary Robert E. Rubin and the mayors criticized Congress for failing to include in draft tax legislation incentives to clean up contaminated industrial zones, hire people off welfare and invest in financial institutions that fund urban economic development.

They also faulted the House and Senate for failing to support a second round of empowerment zones and enterprise communities, which provide tax credits to spur economic development in depressed rural and urban areas.

Republicans in Congress countered that the Clinton administration is shortchanging urban areas itself by not endorsing broader capital gains tax reductions in the GOP plans.

“The most important thing for American cities is job growth and economic opportunity, and the Clinton plan is lacking in both those areas, particularly in regard to job-creating capital gains relief and tax incentives for businesses,” said Ari Fleisher, spokesman for the House Ways and Means Committee.

Congressional Republicans considered including the administration’s urban initiatives in its tax package, but given the many competing interests, “not everything sought can be accepted,” Fleisher said.

Gore went to bat for the urban initiatives because President Clinton is out of the country and Senate and House members plan to meet in conference soon to reconcile differences between their versions of the five-year, $85-billion tax-cut package.

The U.S. Conference of Mayors sent a letter to Congress last month urging the drafters of the tax-cut bill to include $2 billion for tax incentives for cleaning up abandoned industrial areas known as brownfields.

“Across our nation, hundreds of thousands of abandoned and underutilized properties are lying idle because of past environmental policy and job creation,” said the letter, which was signed by 65 mayors.

“The cleanup and redevelopment of such sites must be made economically attractive to the private sector in order for sustained redevelopment to occur,” the letter said.

The Treasury Department estimates that the $2 billion in tax credits for brownfields would be complemented by more than $10 billion of private-sector funds, leading to redevelopment of as many as 30,000 contaminated areas.

Dallas Mayor Ron Kirk said his city has spent $250,000 in federal brownfields funds to leverage $50 million in private investments in areas of the city that were underutilized.

“I’m perplexed why Congress would leave this out,” Kirk said. “The good news is it’s still early, and I don’t want to presume that Congress will not keep its word.”

Kirk cited as an example the cleanup of an old paint factory site in Dallas. The project attracted a private developer who invested $35 million to build a mixed-use residential and commercial building.

Of the four administration initiatives mentioned by Gore, the House included in its tax proposal a scaled-back version of the proposed tax incentives for hiring former welfare recipients, and the Senate included a limited version of the brownfields initiative.

*

The House intends to consider the other urban problems addressed by the Clinton initiatives in later legislation.

Brownfields, for example, will be encompassed in Superfund legislation, and urban revitalization will be addressed later this year or next year as part of a sweeping anti-poverty measure.

A spokeswoman for the Senate Finance Committee, which drafted the Senate version, said congressional leaders would consider the president’s positions on urban tax initiatives during the meeting of the conference committee, which is scheduled to start Friday.

“We’re going into the conference considering the proposal,” said Christina Pearson. “We do have these types of proposals, so I guess there is room for agreement.”